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United Nations A/CN.9/SER.C/ABSTRACTS/176*
General Assembly
Distr.: General
1 December 2016
Original: English/French
V.16-10249 (E) 081216 091216
*1610249*
United Nations Commission on
International Trade Law*
CASE LAW ON UNCITRAL TEXTS
(CLOUT)
Contents Page
Cases relating to the United Nations Convention on Contracts for the International Sale
of Goods (CISG) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Case 1631: CISG [7; 8]; 46; 47; 48; 49; 50; 51 - Australia: New South Wales Supreme
Court, No. 50185/06, Guang Zhi Gao Australia PTY Limited (GDA) v. Fortuna Network Pty
Ltd (Fortuna) (4 November 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Case 1632: CISG 1(1)(a); 6; 19; 92; 97(4); 100 - Denmark: Sø og Handelsretten,
No. SH2015.H-20-14, Blohm + Voss Oil Tools GmbH v. C.C. Jensen A/S (15 September
2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Case 1633: CISG 39; 39(2) - France: Court of Cassation, Commercial Division, Appeal
No. 14-25359, Caterpillar Energy Solutions GmbH v. Allianz IARD SA, Electricité
industrielle JP Fauche SA and CirclePrinters Europe SA (21 June 2016) . . . . . . . . . . . . . . . . 6
Case 1634: CISG 1(1)(a); 58; 59 - Mexico: Tribunal de Apelación de Baja California,
Banks Hardwoods California LLP v. Jorge Ángel Kyriakides García (24 March 2006) . . . . . 7
Case 1635: CISG 35 - Norway: Agder Appeals Court, LA-2012-186207, Gulvplassen AS v.
Homburg Houtimport B.V (7 June 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Case 1636: CISG 1(1)(a); 25; [39]; 61(1); [62] - People’s Republic of China: Zhejiang High
People’s Court, Zhe Shang Wai Zhong Zi No. 144 (2013) (27 December 2013) . . . . . . . . . . . . 8
Case 1637: CISG 1(1)(a) - People’s Republic of China: Supreme People’s Court, Min Shen
Zi No. 1402 (2012) (24 December 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Case 1638: CISG 1(1)(a); 47(1); 49; 80 - Russian Federation: The International
Commercial Arbitration Court at the Russian Federation Chamber of Commerce and
Industry, Arbitral award in case No. 14/2014 (3 December 2014) 10
Case 1639: CISG 9(2) - United States: Bankruptcy Court for the Eastern District of
Pennsylvania, 511 B.R. 738 (Bankr. E.D. Pa., 18 June 2014), In re World Imports, Ltd.
(18 June 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
__________________
* Reissued for technical reasons on 23 January 2017.
A/CN.9/SER.C/ABSTRACTS/176
V.16-10249 2/13
Cases relating to the United Nations Convention on Contracts for the International Sale
of Goods (CISG) and to the Convention on the Limitation Period in the International
Sale of Goods (1980, amended text) (Limitation Convention) . . . . . . . . . . . . . . . . . . . . . . . 12
Case 1640: CISG 3(1)(b); 8; 11; Limitation Convention (1980, amended text) [8];
9(1); 19 - Poland: Warsaw Court of Appeals, I Aca 368/14, Company W. v. Company S.
(23 July 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
A/CN.9/SER.C/ABSTRACTS/176
3/13 V.16-10249
Introduction
This compilation of abstracts forms part of the system for collecting and disseminating
information on Court decisions and arbitral awards relating to Conventions and Model
Laws that emanate from the work of the United Nations Commission on International
Trade Law (UNCITRAL). The purpose is to facilitate the uniform interpretation of these
legal texts by reference to international norms, which are consistent with the international
character of the texts, as opposed to strictly domestic legal concepts and tradition.
More complete information about the features of the system and its use is provided in the
User Guide (A/CN.9/SER.C/GUIDE/1/REV.1). CLOUT documents are available on the
UNCITRAL website: (www.uncitral.org/clout/showSearchDocument.do).
Each CLOUT issue includes a table of contents on the first page that lists the full
citations to each case contained in this set of abstracts, along with the individual
articles of each text which are interpreted or referred to by the Court or arbitral
tribunal. The Internet address (URL) of the full text of the decisions in their original
language is included, along with Internet addresses of translations in official United
Nations language(s), where available, in the heading to each case (please note that
references to websites other than official United Nations websites do not constitute an
endorsement of that website by the United Nations or by UNCITRAL; furthermore,
websites change frequently; all Internet addresses contained in this document are
functional as of the date of submission of this document). Abstracts on cases interpreting
the UNCITRAL Model Arbitration Law include keyword references which are
consistent with those contained in the Thesaurus on the UNCITRAL Model Law on
International Commercial Arbitration, prepared by the UNCITRAL Secretariat in
consultation with National Correspondents. Abstracts on cases interpreting the UNCITRAL
Model Law on Cross-Border Insolvency also include keyword references. The abstracts
are searchable on the database available through the UNCITRAL website by reference
to all key identifying features, i.e. country, legislative text, CLOUT case number,
CLOUT issue number, decision date or a combination of any of these.
The abstracts are prepared by National Correspondents designated by their
Governments, or by individual contributors; exceptionally they might be prepared by
the UNCITRAL Secretariat itself. It should be noted that neither the National
Correspondents nor anyone else directly or indirectly involved in the operation of the
system assumes any responsibility for any error or omission or other deficiency.
____________
Copyright © United Nations 2016
Printed in Austria
All rights reserved. Applications for the right to reproduce this work or parts thereof are welcome
and should be sent to the Secretary, United Nations Publications Board, United Nations
Headquarters, New York, N.Y. 10017, United States of America. Governments and governmental
institutions may reproduce this work or parts thereof without permission, but are requested to inform
the United Nations of such reproduction.
A/CN.9/SER.C/ABSTRACTS/176
V.16-10249 4/13
Cases relating to the United Nations Convention on Contracts for the
International Sale of Goods (CISG)
Case 1631: CISG [7; 8]; 46; 47; 48; 49; 50; 51
Australia: New South Wales Supreme Court
No. 50185/06
Guang Zhi Gao Australia PTY Limited (GDA) v. Fortuna Network Pty Ltd (Fortuna)
4 November 2009
Original in English
Available at: http://www.austlii.edu.au
In early 2005, a Chinese air-conditioner manufacturing company, through its
Australian agent, the plaintiff, entered into a contract with an Australian company
(i.e. the defendant) owner of a trademark used to sell a range of goods, including
air-conditioners. During the course of their commercial relation, the parties signed a
series of agreements for the commercialization of Chinese air -conditioners using the
defendant’s trademark brand. The defendant, in return, would be in charge of the
marketing and after sale services. However, the defendant was faced with a high
volume of warranty claims from consumers, which at first were solved by the
shipment of new units to replace the defective ones, but ended up with the complete
suspension of the sales of the air-conditioning units. As there were no further sales of
air-conditioners they remained in stock, depreciating at the defendant’s expense. To
solve the issue, the defendant requested financial assistance from the Chinese supplier
for the replacement of the non-conforming goods and used its own resources to make
some of those replacements. The supplier did not provide any financial assistance but
rather sent some technicians to investigate and assist in the replacements. Eventually,
the parties entered into a final agreement (September 2006), which according to the
plaintiff was a deed of release that terminated their contractual relationship. One of the
most important questions before the court was whether such purported deed of release
was valid or not.
The defendant, contending the validity of the deed, claimed to have avoided the
contract through a conversation that occurred in late December 2005 or early January
2006 and argued that under the CISG it is not necessary for any more formality than
simple oral evidence. It further stressed that under Article 51 CISG, where the seller
delivers only part of the goods or if only part of the goods are in conformity with the
contract the buyer may, under Articles 46 to 50 of the Convention, declare the contract
avoided in its entirety if the failure amounts to a fundamental breach of contract
pursuant to Article 25 CISG.
Although acknowledging that the transaction was governed by the CISG, the Court
went on to consider whether the contractual relationship had been in fact terminated
by the purported deed of release. In order to establish if the deed was valid, the Court
needed to consider, among others, whether the deed was wholly or partly in writing. In
this regard, after noting that the deed was not wholly in writing, t he Court stated that
“[w]here a contract is partly written and partly oral, the terms of the contract are to be
ascertained from the whole of the circumstances…”. The Court thus made its factual
decision based on which witnesses were reliable, the parties’ intentions, the
circumstances leading to the necessity of the purported deed and the degree of
formality that it had and applied domestic law to rule that the deed was a binding and
legally enforceable contract.
A/CN.9/SER.C/ABSTRACTS/176
5/13 V.16-10249
Case 1632: CISG 1(1)(a); 6; 19; 92; 97(4); 100
Denmark: Sø og Handelsretten (Maritime and Commercial Court)
No. SH2015.H-20-14
Blohm + Voss Oil Tools GmbH v. C.C. Jensen A/S
15 September 2015
Original in Danish
Available at: http://domstol.fe1.tangora.com
Abstract prepared by Joseph Lookofsky, National Correspondent
In 2009, a German company (B), which had been commissioned to restore a historic
yacht, engaged a Danish company (S) to replace the yacht’s portholes. Claiming that
the portholes subsequently supplied by S were defective, B sued S in the Maritime and
Commercial Court in Denmark.
Although the parties agreed that their dispute regarding the conformity of the
portholes was governed by “Danish law” (as opposed to German law), they disagreed
as to whether or not the CISG, which is part of Danish law, applied in this case, and
their disagreement on this applicable law issue was rooted in a classic “battle of
forms”. In the offer which S originally submitted to B, as well as on several
subsequent occasions, S referred to “ECE 188”, the well-known standard form which
designates “the law of the Vendor’s country” as the applicable law. In its reply to that
original offer, however, as well as on several subsequent occasions, B referred to its
own standard terms which expressly excluded the CISG, even when it would
otherwise apply by default.
On the applicable law issue, the Danish court held in favour of B, ruling that the CISG
did not apply in this case. In this connection the court emphasized that S, in its
final revised invoice to B, had simply referred to B’s final revised order, which
included B’s standard terms, i.e. on this particular occasion, S had not, as previously,
referred to its own standard (ECE 188) terms. In holding in favour of the party who
got in the “last shot”, the court did not state whether it based that decision on Danish
domestic law or on CISG Part II on Contract Formation. But since neither party’s
lawyers had argued on the basis of CISG Article 19 or any other CISG rules, the
court’s decision regarding the applicable law was surely grounded in Danish domestic
contract formation rules. Notably in this regard, although the Article 92 declaration
made by Denmark when it ratified the CISG had been withdrawn pursuant to
Article 97(4) before this particular case was decided, that declaration nonetheless
continued to exclude the application of CISG Part II in this situation, since the
‘proposal for concluding the contract’ between the parties in this case was made
before the declaration was withdrawn, cf. Article 100.
Ultimately, on the merits, the court held in favour of the Danish defendant (S), in
that B, who bore the burden of proof, failed to convince the court that the portholes
were in fact defective. As noted by the court in this connection, neither party had
argued as to whether the outcome on this conformity issue might have been different if
the case had been decided under the conformity rules in CISG Part III.
A/CN.9/SER.C/ABSTRACTS/176
V.16-10249 6/13
Case 1633: CISG 39; 39(2)
France: Court of Cassation, Commercial Division
Appeal No. 14-25359
Caterpillar Energy Solutions GmbH v. Allianz IARD SA, Electricité Industrielle JP
Fauche SA and CirclePrinters Europe SA
21 June 2016
Original in French
Published in French: Bulletin of Judgments of the Court of Cassation (forthcoming);
Légifrance: www.legifrance.gouv.fr; CISG-France database: www.cisg-france.org,
No. 272; CISG-online database: www.cisg-online.ch, No. 2742.
Abstract prepared by Claude Witz, National Correspondent.
In August 1999, a company based in Germany delivered two generators to a company
based in France. The generators were damaged in December 2001. In January 2003, the
French company brought legal proceedings against the German seller before the
Commercial Court of Meaux in order to obtain compensation for the damage suffered. In
its judgment of 27 June 2014, the Court of Appeal of Paris upheld the ruling under which
the buyer’s claim had been accepted, even though the seller had argued that the claim was
time-barred under German law.1 In that regard, the Court of Appeal of Paris ruled that the
United Nations Convention on Contracts for the International Sale of Goods (1980), which
was applicable to the case, “incorporates the New York Convention of 14 June 1974 on the
limitation period in the international sale of goods”2 and that that Convention “provides
that the limitation period is four years and may be extended to a maximum of ten years”.
Upon an appeal brought by the seller, the Court of Cassation rightly overturned the
judgment delivered by the Court of Appeal of Paris on two grounds.
Firstly, the Court of Cassation observed that neither France nor Germany had signed
the Convention on the Limitation Period in the International Sale of Goods. In light of
that fact, the Court of Cassation concluded that the Court of Appeal of Par is had
violated Article 55 of the French Constitution and Article 3 of the Convention on the
Law Applicable to International Sales of Goods of 15 June 1955.
Under Article 55 of the French Constitution, “treaties or agreements that are duly
ratified or approved shall, as of their publication, have precedence over national
legislation, subject in each case, to their implementation by the other parties.”
According to Article 3, first paragraph, of the Convention on the Law Applicable to
International Sales of Goods, “In default of a law declared applicable by the parties
[…], a sale shall be governed by the domestic law of the country in which the vendor
has his habitual residence at the time when he receives the order.”
Secondly, the seller had argued unsuccessfully before the Court of Appeal that the claim
made against it was inadmissible under Article 39 of the United Nations Sales Convention.
The Court of Appeal had nevertheless declared the claim admissible on the grounds that
it was not time-barred, thereby misconstruing the nature of the two-year period provided
for by Article 39, paragraph 2, of the United Nations Sales Convention. The Court
of Cassation overturned the judgment on the grounds that it violated Article 39 of
the United Nations Sales Convention and Article 3 of the Convention on the Law
Applicable to International Sales of Goods, ruling that “the period of two years
provided for by Article 39 of the United Nations Sales Convention is the period within
which the buyer must give notice to the seller of a lack of conformity rather than the
period within which the buyer must claim compensation for any damage” .3
__________________
1 See CISG France No. 12/00436.
2 Convention on the Limitation Period in the International Sale of Goods, 1974 (New York).
3 See Court of Cassation, 3 February 2009, No. 07/21827, CLOUT case No. 1027; CISG Digest,
art. 39, No. 29, note 344.
A/CN.9/SER.C/ABSTRACTS/176
7/13 V.16-10249
Case 1634: CISG 1(1)(a); 58; 59
Mexico: Tribunal de Apelación de Baja California (Superior Court of Baja California)4
Banks Hardwoods California LLP v. Jorge Ángel Kyriakides García
24 March 2006
Original in Spanish
The dispute arose from a contract for the supply of wood between a United States
seller and a Mexican buyer. The buyer failed to comply with the payment of t he goods
received and the seller commenced a lawsuit in Mexico.
In court, the buyer acknowledged having received the goods but argued that between
the buyer and the seller there was a mutual agreement according to which the seller
would grant credit to the buyer to purchase the merchandise. Consequently, the
invoices were always payable after delivery of the goods. The buyer further argued
that this was a previously convened practice between the parties, which was the reason
why their commercial relationship continued even after the supposed deadline of the
last allegedly unpaid invoice had expired, and the buyer continued purchasing
merchandise from the seller for long after. In the buyer ’s view, Article 58 CISG was
thus not applicable because the simultaneous exchange of goods and price established
as a default rule in that article was not the usual practice between the parties.
Moreover, since the provisions of the Convention did not apply, the buyer further
contended that the seller, in order to receive payment, if there was any to be made,
first had to make a formal request as provided under Article 2080 of the Mexican
Federal Civil Code, before commencing any lawsuit. However, the buyer did not
provide any evidence of payment of the invoices presented by the seller, so the lower
court found in favour of the seller and ordered the buyer to pay the amount due.
The buyer appealed this decision to the Superior Court of Baja California. The Court
held that the CISG was applicable (Article 1(1)(a) CISG) and on the basis of
Article 133 of the Mexican Constitution the Convention displaced the application of
domestic law. Accordingly, the Court stated that the dispute should be resolved on the
basis of Articles 58 and 59 CISG. As to Article 58 CISG, the Court no ted that since
there was no specified time for payment and no evidence of either a different
previously agreed upon payment date or of the payment itself, the buyer had to pay the
seller the full price of the goods when those were delivered and/or made ava ilable to
the buyer. The Court also held that pursuant to Article 59 CISG the seller had no
obligation to make any formal request for payment or comply with any other formality
in order to receive payment on the agreed date. In this regard, the Court state d that
notices regarding the shipment and/or delivery of the goods are not mandatory
requirements in order to receive payment but they are rather adequate means to
demand it. Therefore, the seller may make use of such notices without them
constituting a formal requirement before initiating legal proceedings. The Court thus
affirmed the decision of the Court of first instance and ordered the buyer to pay the
due amount to the seller.
Case 1635: CISG 35
Norway: Agder Appeals Court
LA-2012-186207
Gulvplassen AS v. Homburg Houtimport B.V
7 June 2013
Original in Norwegian
This case primarily deals with the burden of proof under Article 35 CISG.
The case arose from a dispute between a Dutch seller (seller) and a Norwegian buyer
(buyer) about payment for wooden floors. The wooden floors delivered by the seller to
__________________
4 This case is cited in the CISG Digest (2016 Edition), available at: www.uncitral.org.
A/CN.9/SER.C/ABSTRACTS/176
V.16-10249 8/13
the buyer cracked after installation. The buyer held that the cracks arose because the
floors, upon delivery, contained a higher percentage of moisture than agreed. Based on
this, the buyer claimed that the goods were not in conformity with the contract and
thus refused to pay the full price and demanded damages.
Norway and the Netherlands are both parties to the CISG, and the contract in question
was a contract for the sale of goods. Hence, absent a choice of the parties to the
contrary, the contract was governed by the CISG. At this time, the CISG was
incorporated into Norwegian law through the Norwegian Sale of Goods Act (SGA),
which governed both domestic and international contracts for the sale of goods. Thus,
although not explicitly mentioned by the court, which came to its conclusion without
reference to either the CISG, the Norwegian SGA, case law or academic commentary,
this issue was resolved on the basis of the Norwegian SGA Article 17 (consistent with
Article 35 CISG).5
The key issues in this case were (a) which party had the burden to prove whether the
goods conformed to the contract, and (b) what was the evidentiary threshold to prove
non-conformity. The Court stated that the party asserting that the goods are
non-conforming bears the burden of proof; in this case, the buyer. With regard to
whether the buyer had presented sufficient evidence that the wooden floors were
non-conforming, the Court found that the buyer had not met the evidentiary threshold.
The evidence presented proved that the wooden floors had cracked, but it did not
establish what had caused the cracks. Thus, the buyer had not provided sufficient
evidence to satisfy that the cracks in the floors arose due to non -conformity upon
delivery from the seller.
Case 1636: CISG 1(1)(a); 25; [39]; 61(1); [62]
People’s Republic of China: Zhejiang High People’s Court
Zhe Shang Wai Zhong Zi No. 144 (2013)6
27 December 2013
Original in Chinese
Published in Chinese: Judicial Opinions of China
Available at: www.court.gov.cn
The buyer, a United States company, and the seller, a Chinese company, entered into
two machine purchase contracts in 2008, pursuant to which the seller undertook to
manufacture the machine according to the requirements specified in the plans attached
to the contracts. If the seller were to visit the buyer in order to train the buyer ’s
technicians or to test and service the machine, all hotel charges and air fares would be
borne by the buyer. The seller would provide a 12 -month conditional warranty service
for replacement of damaged parts free of charge.
In October 2009, the buyer paid the entire cost of the machine and the machine was
delivered to the buyer in March of the following year. Later on, the seller visited the
buyer twice for testing and servicing the machine. In December 2012, the buyer
concluded that there was a serious defect in the machine and filed a lawsuit,
requesting the court to allow avoidance of the contract and to order the seller to return
the payment for the machine. The seller counterclaimed requesting the buyer to pay
the round-trip air tickets for its visit to the buyer to adjust and test the machine.
The Court held that the case constituted a dispute over a contract for the international
sale of goods and the Convention would apply pursuant to Article 1(1)(a) CISG, in
__________________
5 In November 2014, after this decision was rendered, the CISG was incorporated into Norwegian
law through a reference to the original CISG text instead of through the Norwegian SGA.
Consequently, this case should now be resolved through direct application of the CISG.
6 This case is cited in the CISG Digest (2016 Edition), available at: www.uncitral.org.
A/CN.9/SER.C/ABSTRACTS/176
9/13 V.16-10249
accordance with Article 142, Paragraph 2, of the General Principles of Civil Law of
the People’s Republic of China. Moreover, the Court noted that the application of the
Convention had not been excluded by the parties.
The plaintiff claimed it had expressly indicated that it would not agree to repair the
machine and insisted on avoidance of the contract and the return of all sums paid for
the machine. Whether such a claim should be supported was subject to a fundamental
breach of contract by the seller as defined in Article 25 CISG. The central point of the
dispute was whether the machine was defective and could not be repaired, as a result
of which the purposes of the contract would be unachievable. The Court held that
since the buyer had paid the full cost of the machine and had accepted delivery, this
would constitute preliminary recognition by the buyer of the conformity of the
machine to the contract. Further, the seller had twice sent its representatives to the
United States for the purposes of adjusting and servicing the machine, that action
falling within the scope of normal after-sales maintenance and repair. Thirdly,
according to the provisions of Article 39 CISG, the buyer loses the right to rely on a
lack of conformity of the goods if it does not give notice to the seller specifying the
nature of the lack of conformity within a reasonable time after it has discovered it or
ought to have discovered it. Two years had passed between the time of actual receipt
of the machine and the filing of the lawsuit, and the buyer had not provided evidence
that it had given the seller notice of a serious quality defect in the machine in question.
The buyer should therefore be deemed to have lost its right to claim for the machine ’s
defect. Therefore, the plaintiff ’s claim for avoidance of the contract and the return of
all sums paid for the machine could not be established.
With regard to the counterclaim of the defendant, according to Article 61(1) CISG, the
matter was whether the seller visited the buyer in order to train technicians and to test
and adjust the machine. The court held that the main purpose of the two visits by the
seller’s representatives was to test the machine and train personnel, and that that fact
supported the seller’s request for payment by the buyer of the air tickets purchased for
those visits.
The Court thus ruled against the plaintiff and supported the counterclaim of the
defendant. The plaintiff appealed, however the Court of second instance ruled that
there was no error in the judgment of the lower court and dismissed the appeal,
affirming that judgment.
Case 1637: CISG 1(1)(a)
People’s Republic of China: Supreme People’s Court
Min Shen Zi No. 1402 (2012)7
24 December 2012
Original in Chinese
Published in Chinese: Judicial Opinions of China
Available at: www.court.gov.cn
The plaintiff, an Egyptian company, sued the defendant for loss of goods. The Court of
second instance ruled that the evidence provided by the plaintiff was not sufficient to
determine that the defendant was the counterparty to the sales contract, and decided
against the plaintiff. The plaintiff petitioned for retrial, alleging that the Court of
second instance lacked evidence to prove the basic facts that it had determined, and
had erred in the application of the law. It requested that the judgment of the Court of
second instance be overruled and that its claim be upheld.
The Court of retrial held that there was no error in determining the fact that the case
concerned a dispute over a contract for the international sale of goods. With regard to
__________________
7 This case is cited in the CISG Digest (2016 Edition), available at: www.uncitral.org.
A/CN.9/SER.C/ABSTRACTS/176
V.16-10249 10/13
the issue of application of the law, since the transaction involving the goods in
question was carried out by means of a pro forma invoice, neither the buyer nor the
seller had agreed, through the invoice or otherwise, on the applicable law. Meanwhile,
given that both China and Egypt were contracting States under the CISG, the rights
and obligations of both the seller and the buyer should be governed by that
Convention (Article 1(1)(a)). In the absence of prior agreement by the parties on the
law applicable to any disputes between them, the Court of second instance held that it
was inappropriate to decide on Chinese law as the applicable law on the basis of the
principle of proximate connection. Moreover, a party’s objection to the application of
the Convention cannot amount to an exclusion of the CISG. However, since the
evidence submitted by the Egyptian company was insufficient to identify the
counterparty to the sales contract, the issue of the law to be applied did not affect the
outcome of the decision of the Court of second instance.
In conclusion, the application by the Egyptian company for retrial was rejected by the
Court.
Case 1638: CISG 1(1)(a); 47(1); 49; 80
Russian Federation: The International Commercial Arbitration Court at the Russian
Federation Chamber of Commerce and Industry
Arbitral award in case No. 14/20148
3 December 2014
Original in Russian
The issues before the court concerned the meaning of “non-delivery” under
Article 49(1)(b) CISG and what is to be considered “a reasonable length of time” in
light of Article 47(1) CISG.
A contract for the purchase of goods was concluded between a Dutch seller and a
Russian buyer. After making an advance payment, in accordance with the terms of the
contract, the buyer argued that the seller had not fulf illed its obligation to deliver the
goods, as the seller had not informed the buyer that the goods were placed at the
buyer’s disposal. The buyer sent a request to the seller to deliver the goods according
to the contract but it did not receive any reply. The buyer thus filed a lawsuit in court
to declare the contract avoided pursuant to Article 49(1)(b) CISG and recover the
advance payment since the seller had failed to deliver the goods even within the
additional period of time fixed by the buyer in accordance with Article 47(1) CISG.
The seller counterclaimed to receive compensation for the losses incurred as a result
of the buyer’s non-compliance with its obligation to accept delivery of the goods and
to receive the outstanding amount of the purchase price. The seller argued that it had
sent an official request to the buyer to receive those sums before action was brought to
court. The seller also stated that it had never received from the buyer any notice of
avoidance of the contract because of its alleged failure to deliver the goods.
The Court held that since the contract was concluded between parties whose
place of business was in two different Contracting States and the parties had
made reference to the Convention in their contract, the Convention was applicable
(Article 1(1)(a) CISG).
The Court further noted that the conduct of the seller did not constitute non -delivery in
the sense of Article 49(1) CISG, since the buyer did not prove that the seller had
committed a fundamental breach of its obligations (Article 25 CISG) and that the
seller had not delivered the goods within the additional period of time fixed by the
buyer pursuant to Article 47(1) CISG. Furthermore, the Court found that the additional
period of time of ten days fixed by the buyer to deliver the goods was not of
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8 This case is cited in the CISG Digest (2016 edition), available at: www.uncitral.org.
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reasonable length in light of the eight months production time of the goods sold. For
these reasons, the Court quashed the claim of the buyer.
Referring to the counterclaim of the seller, the Court noted that the seller had not
provided evidence that it had sent the buyer notice that the goods were at the buyer ’s
disposal according to the practice that they had established. Referring to Article 80
CISG, the Court thus stated that the seller may not rely on the buyer ’s failure to
perform to the extent that such failure was caused by the seller ’s omission.
Case 1639: CISG 9(2)
United States: Bankruptcy Court for the Eastern District of Pennsylvania (decision
affirmed by the U.S. District Court for the Eastern District of Pennsylvania, United
States, 19 January 2016 (2016 WL 215229))
511 B.R. 738 (Bankr. E.D. Pa., 18 June 2014)
In re World Imports, Ltd.
18 June 2014
Original in English
Abstract prepared by Harry M. Flechtner, National Correspondent
Sellers in transactions governed by the CISG shipped goods to a United States buyer,
who took over the goods and then initiated bankruptcy proceedings under United
States federal bankruptcy law without having paid the price. The sellers filed claims
for the goods’ value in the buyer’s bankruptcy proceedings, and argued that their
claims were entitled to enhanced “administrative expense” priority over other creditor
claims. The sellers’ argument was based on a provision of the United States federal
Bankruptcy Code that grants administrative expense priority to claims for the value of
goods that were sold to a debtor-buyer in the ordinary course of its business, provided
the goods were “received” by the buyer within 20 days before bankruptcy proceedings
were initiated. The sellers’ sales were conceded to be “ordinary course”; the issue was
whether the buyer “received” the goods for purposes of the Bankruptcy Code
provision within 20 days of initiating bankruptcy proceedings. United States federal
Bankruptcy Code does not expressly address when a buyer is deemed to have
“received” goods.
The sellers had delivered the goods to carriers in their home country more than 20 days
before the buyer filed for bankruptcy, but the buyer took possession of the goods from
the carrier in the United States within 20 days of the buyer’s bankruptcy petition. The
bankruptcy court for the Eastern District of Pennsylvania, the court of first instance
for the sellers’ claims, noted that, in transactions governed by generally-prevailing
United States domestic sales law (Article 2 of the Uniform Commercial Code (“UCC”)9),
the time when a buyer “receives” goods for purposes of the federal Bankruptcy Code could
be determined by reference to the definition in UCC § 2-103(1)(c), which provides that a
buyer receives goods when it takes “physical possession” of them. Under this
approach, the buyer would be deemed to have received the goods when it received
possession from the carrier within 20 days of initiating bankruptcy proceedings, and
the sellers’ claims would be entitled to priority as administrative expenses.
The debtor and the representative of non-priority unsecured creditors, however,
pointed out that the sales transactions at issue were governed by the CISG rather than
the UCC. The CISG does not define when a buyer “receives” goods, but the bankruptcy
court noted that the parties’ sales contract provided for delivery “FOB” port of origin;
although the parties had not expressly incorporated the INCOTERMS rules on the
meaning of their FOB term, the court found that those rules are incorporated into the
CISG under Article 9(2) as internationally-accepted trade usages. The INCOTERMS
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9 UCC Article 2 is the statute governing sales of goods in all United States states except Louisiana.
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V.16-10249 12/13
2010 rules for the term “FOB” also do not provide a definition of when a buyer
“receives” goods, but the bankruptcy court noted that those rules provide that “once
the seller delivers the goods, the risk of loss or damage passes to the buyer ”; “[o]nce
delivered [to the carrier],” the court concluded, “the goods are perforce constructively
received by the Debtor.” The court therefore ruled that the buyer “received” the goods,
for purposes of the United States domestic federal bankruptcy rule, when the goods
were “delivered” at the port of origin; thus the buyer had “received” the goods more
than 20 days before it initiated bankruptcy proceedings, and the sellers’ claims were
not entitled to administrative expense priority.
The apparent result of this decision is that sellers whose claims would be entitled to
administrative expense priority if United States domestic sales law governed their
transactions may not be so entitled if the CISG is the applicable law. On the facts of the
World Import decision, for example, a change in the law governing the sales — with
no other change in facts — would produce different results.10
The sellers appealed the bankruptcy court decision to the federal district court for the
Eastern District of Pennsylvania — normally a trial court but, in this bankruptcy
context, functioning as an appeals court. The district court adopted the reasoning of
the bankruptcy court, and affirmed the decision.
Cases relating to the United Nations Convention on Contracts for the International
Sale of Goods (CISG) and to the Convention on the Limitation Period in the
International Sale of Goods (1980, amended text) (Limitation Convention)
Case 1640: CISG 3(1)(b); 8; 11; Limitation Convention (1980, amended text) [8];
9(1); 19
Poland: Warsaw Court of Appeals
I Aca 368/14
Company W. v. Company S.
23 July 2015
Original in Polish
Abstract prepared by Małgorzata Pohl
In November 2004 the parties concluded a contract for the sale of machines and other
equipment. The contract was signed by the Dutch seller and the representatives of the
Polish buyer (the defendant). After the conclusion of the contract and after the first
invoice for the down-payment had been issued, the buyer asked the seller to amend
and redraft all of the invoices so that a different company (T.S.) would appear as “the
buyer”. The seller agreed and the invoices as well as the contract were redrafted
accordingly. This change was made, as the defendant explained, in order to take
advantage of more favourable payment conditions. In January 2007, the Dutch seller
assigned its claim for the outstanding purchase price to another co mpany
(Company W.). Later on, that company sued the Polish buyer before a Polish court
seeking the payment of the acquired claim. The payment was due since May 2005.
The Court of first instance dismissed the claim, holding that the Dutch seller and
Polish buyer had terminated the original contract of November 2004. The Court
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10
The parties to the transactions in World Imports provided for delivery of the goods “FOB” the port
of shipment. Because the transactions were governed by the CISG, the bankruptcy court concluded
that a buyer “receives” goods under that term at the port of shipment. UCC Article 2 contains its
own statutory definition of the term “FOB” in § 2-319, but with respect to the issues discussed by
the bankruptcy court it does not differ in substance from the INCOTERMS rules applied by the
court; nevertheless, when UCC Article 2 governs a sale, the bankruptcy court’s analysis of whe n a
buyer “receives” goods under an FOB term would apparently be pre-empted by the definition of the
term “receipt” in UCC § 2-103(1)(c).
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13/13 V.16-10249
explained that the defendant requesting the Dutch seller to modify the contract
replacing the defendant with a fictitious buyer (T.S.) had made an offer and the
redrafting of the contract and invoices amounted to an acceptance of such offer.
Therefore, a new contract had been concluded between the Dutch company and the
new buyer (T.S.) (according to Article 11 CISG no specific form is required to
conclude a contract). Furthermore, the Court found it irrelevant that the parties, in
January 2007, had redrafted the choice of law clause (indicating Polish law as
applicable) thus changing what was agreed in the sales contract of November 2004.
The Court of Appeals disagreed and reversed the decision. The defendant filed an
appeal to the Supreme Court, which quashed the decision of the Court of Appeals and
remanded the case to the court for further consideration.
When the case was reheard, the Court of Appeals pointed out that there was no
termination of contract between the Dutch seller and the Polish buyer. Although the
Polish buyer asked the seller to be replaced with another buyer in the contract and the
invoices, the Polish buyer clearly indicated that the new arrangement did not change
the previous arrangements between the parties. The buyer would remain the Polish
company and the purchase through a new buyer (T.S.) was done only for reasons of
financial convenience. Moreover, the goods in question were sent directly from the
Dutch seller to the premises of the Polish buyer, an arrangement accepted by the
defendant. Further, the new buyer (T.S.) did not take up an active role at any stage of
contract performance. It was the defendant that proactively finalized the contract and
had it enforced. As per the Supreme Court’s ruling, the parties’ conduct needs to be
interpreted in light of Article 8 CISG. In the case at hand, this resulted in the
conclusion that the defendant was the actual buyer and party to the contract, and that it
was obliged to pay the outstanding amount of the purchase price.
The Court of Appeals also dealt with the issue not previously examined in the
proceedings of whether or not the limitation period for the purchase price had expired.
There was no dispute that from the time of the conclusion of the contract until the
choice of Polish law in January 2007, the contract was governed by Dutch law (and by
the CISG). Since the Netherlands was not party to the “Limitation Convention”, Dutch
law was to be applied to determine whether the limitation period had expired.
However, since in January 2007 the parties had modified their choice of applicable
law opting for Polish law, the Limitation Convention would apply, as Poland is a
ratifying State of that Convention (Article 3(1)(b) Limitation Convention). Pursuant to
Article 9(1) Limitation Convention, the four years limitation period commences to run
on the date on which the claim accrues. However, in the case at hand, an application
for mediation had been filed with the Court in May 2007. In accordance with Article
19 Limitation Convention and with Polish law (Polish Civil Code, Article 123§1(1))
this action interrupted the running of the limitation period. The mediation, without any
settlement agreement, ended in July 2007, at which point a new limitation period of
four years had commenced (Article 19 Limitation Convention).
The Court thus found in favour of the plaintiff allowing also its claim for interest.